Obamacare cuts Medicare Advantage payments. But those cuts have either so far been put off or are just beginning to bite. The first real cuts hit in 2014 and the first big cuts come in 2015.
These provider cuts in their totality are a tiny percentage of health care spending in the first few years and have had almost no impact so far. The 2% across the board sequester cuts that have already hit provider payments and Medicare Advantage plans have been far more significant.
Some have argued the new Medicare Accountable Care Organization (ACO) program, that reorganizes provider payment away from fee-for-service, is having a big impact. First, private ACOs were around long before the Obamacare architects had the idea. Second, the Medicare ACO program is only a pilot program just getting off the ground. Recent reports regarding the first 32 advanced “Pioneer” ACOs only showed very limited and mixed results for the first year.
Then there is the high cost health plan “Cadillac” tax designed to discourage overly generous employer plans. It begins in 2018.